FTSE 100 edges higher ahead of domestic CPI data, Fed policy meet

FILE PHOTO: The London Stock Exchange Group offices are seen in the City of London, Britain

By Siddarth S and Shubham Batra

(Reuters) -Britain's FTSE 100 eked out some gains on Tuesday after Hargreaves Lansdown's 2023 earnings estimates lifted investment banking and brokerage services shares, while investors awaited domestic inflation data and key central bank policy meetings.

The exporter-heavy FTSE 100 was up 0.1%, while the mid-cap index fell 0.1%.

The investment banking and brokerage services price return index rose 1.2%, led by a 4.9% gain in Hargreaves Lansdown after the investment platform beat its annual profit estimates.

Energy stocks climbed 0.9%, tracking higher oil prices. [O/R]

Markets are focused on monetary policy decisions from the U.S. Federal Reserve and Bank of England (BoE) this week along with key UK inflation data, as investors bet on an end to their interest rate hiking cycles.

Money markets see an 80% chance of the BoE hiking rates by 25 basis points to 5.5%.

The domestic annual inflation rate, due on Wednesday, is expected to show a rise to 7% in August from 6.8% in July, while core inflation, which excludes energy and food, is forecast to slow to 6.8% from 6.9%, according to economists polled by Reuters.

"We expect the BoE to hike, but it's a close call. Even if the BoE hikes, it is likely to be the last hike of this cycle," said Mohit Kumar, chief financial economist Europe at Jefferies, in a note.

Shares in Kingfisher sank 12.2% to the bottom of the benchmark index as the B&Q owner downgraded its annual profit forecast by 7% following lower sales in France and Poland.

British online supermarket Ocado Retail, a 50/50 joint venture between Ocado Group and Marks & Spencer, maintained its full-year outlook as it reported a step-up in third-quarter revenue growth.

Shares in Ocado gained 1.6%.

Meanwhile, the Organisation for Economic Co-operation and Development (OECD) cut the UK's growth forecast, now expecting the economy to expand 0.8% in 2024 from 1.0% projected earlier.

(Reporting by Siddarth S and Shubham Batra in Bengaluru; Editing by Mrigank Dhaniwala, Rashmi Aich and Jan Harvey)